All Forum Posts by: Mike Sola

@Stephen Burden congrats!!! what are your numbers like for cash flow and ROI?

I would check craigslist, zillow, and other listing services that have properties for rent. I would then contact the person and see if they need property management. I like this method cause they are free leads and you already know the property is a rental.

@Scott Williams congrats!

I bought a turnkey property for my first hack. It was my first investment! I should have been more diligent about running the numbers because the margins are slim. Trust the numbers. Dont play into the emotion of the deal. 

My first year of real estate investing was a journey!

My biggest successes were:

-first house hack - I am slightly negative since the rents don't fully cover wind insurance. I am only negative about ~100. beats paying the full mortgage!

-successful house flip - I won a house through the foreclosure market, partnered with experienced investors, and made a 15k profit for myself! 

-successful BRRRnB - Got the property through the foreclosure market. My partners suggested we BRRRnB so we did! It is cash flowing extremely well.

-house flip in progress - another property through the foreclosure market. still in rehab

My biggest mistakes/learning points:

-spent a lot of money on marketing with no ROI - I spent a lot of money on direct mail with no ROI. I need to be more focused/specific on the marketing campaign, follow up better, negotiate harder, and track my metrics better.

-rehabs can suck - our second flip turned into a rehab nightmare with delays...it happens! Next time we need to insure that the contractor can start the day the property is closed (however COVID was a factor in this issue)

Overall, Id say I had a good first year of real estate investing.

This year I am definitely looking to flip more houses to pay of my student loans and get more cash flow to get a 100% FIRE ratio.

Good luck in 2021!

look into Jamil Damji, Pace Morby, Bret Daniels, and Ryan Dossey. feel free to DM me with questions!

I have been trying to do it for about a year now and have learned a lot.

ask questions than ask more questions than ask a few more questions....did I mention ask questions?

Dont feel like a question is stupid! If you have a questions ask

thats a big mistake you can ask and it can cost money in the long run

I am on my third hard money flip now and this is how I calculated my net profit

ARV: 120k

10% of ARV for est. closing cost: 120 - 12 = 108

purchase price: 108 - 55 = 53

rehab price: 53 - 28 = 25

loan origination fees: 25 - 5 = 20

insurance: 20 - .8 = 19.2

That is my total profit without considering holding costs. My holding costs are:

Interest: 535/month

utilities: 100/month

My hard money lender wants 20% down for purchase price: 11k

Including other fees, the total cost to close: 16k

If it takes 90 days to rehab and sell, my total holding cost would be: 2k

My estimated profit would be ~17k with a 16k investment for an ROI of over 106%

I guess there are two parts to this post:

1. If I flipped a house for a 20k profit, can I put that money into a 1031 exchange and add my own cash to purchase a new property?

2. Let's say I am able to do #1, if I were to BRRRR and cash-out refi, would that 20k then be taxed?

Thanks for the input

@Jaysen Medhurst. totally get it. I know people that use the ARV and some use the amount financed. I would recommend anyone try both ways to see how the numbers work out.

I am new to wholesaling and I have a potential deal where the seller would be able to seller finance it. I talked with a closing attorney and he said he would not do the closing because setting up the seller financing at the assignment fee is too convoluted. Is there a way to structure this wholesale deal so that the end buyer gets the seller financing and I receive the assignment fee?